Designer Apparel and Footwear (Ready-To-Wear) in Brazil

PROSPECTS

Recovery driven by new price points, but impacting margins

Designer apparel and footwear (ready to wear) returned to growth in 2018, despite widespread economic uncertainty. Most luxury brands have been adapting their prices in recent years to ensure they remain only 10-20% more expensive in comparison to prices in the US or Europe.

Brazilians continue to prefer to buy locally

Although importing requires a logistics process that often results in delayed arrival, luxury brands in Brazil work with the latest collections available. The inverted seasons of the hemispheres are not considered an obstacle since consumers prioritise being fine-tuned with new launches of leading brands (mostly based in Europe and US).

Brands varying from proactive to reactive approaches

Most luxury brands admit that digital influencers have a positive impact on sales in stores. Some brands have seen a rise in demand due to the impact of pop culture, such as the appearance of items in movies (Jimmy Choo’s Lance Sandals in Fifty Shades of Grey) or when celebrities spontaneously use items at parties and weddings.

COMPETITIVE LANDSCAPE

Rational sales approach during challenging times

The prolonged period of crisis is gradually changing the traditional sales-person based approach in stores. Currently, in contrast with the traditional passive attitude of luxury sales people within stores, companies are looking to convince consumers of the cost-benefit of acquiring a product that lasts for generations or at least three times longer than conventional products.

Luxury consumers highly impacted by international trends

Luxury areas (except for eyewear) are only accessible to a very limited high-income group of consumers in Brazil who are typically aware of trends in Europe, the US and Asia. The replacement of the creative director of a brand can generate high expectations regarding the next collection, with consumers actively looking for store staff to ask about the novelties and dates of collections launching in stores, possibilities of pre-ordering and other details.

Strong knowledge of luxury consumers’ needs

Most luxury brands depend on a flagship item or line that motivates consumers to visit stores and represents a high percentage of sales. Many brands are known for specific occasions such as glamorous evening events or sophisticated daytime moments.

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